Shareholders approve deals to take Roan Resources private and to merge SemGroup with Energy Transfer LP
The number of Oklahoma based, publicly traded companies is declining by two.
On Wednesday, shareholders of Roan Resources overwhelming approved its $1 billion merger agreement with privately held Citizen Energy Operating LLC, headquartered in Tulsa.
The same day, SemGroup Corp. and Energy Transfer LP shareholders approved a $1.5 billion deal to combine those firms under Energy Transfer’s flag.
According to a filing made by Roan Resources after markets closed Wednesday, Roan will continue on as the surviving company after its merger, though it will be privately held.
Earlier, details of its announced deal proposed an all-cash transaction where Citizen Energy would buy Roan using equity from its parent, Warburg Pincus LLC, and financial support from other investors to pay Roan shareholders $1.52 per share.
Officials said the deal included an assumption of Roan’s funded net debt of about $780 million by the surviving company.
The fate of both its headquarters at 14701 Hertz Quail Springs Parkway and the future of the company’s 145 employees remained unclear on Wednesday.
They previously stated they expected to close the deal before the end of this year or during the first quarter of 2020.
No update was provided Wednesday on when that closing actually will occur.
Joseph A. Mills, Roan’s executive chairman, previously stated that the deal was the best way to return value to Roan’s shareholders.
“Ultimately, the board unanimously determined that an all-cash transaction with Citizen Energy is in the best interests of our stockholders and the company,” he said when the plan was announced.
The expected closing date for SemGroup’s merger with Energy Transfer LP, meanwhile, is Dec. 5.
That proposal, valued at about $5.1 billion, will pay SemGroup shareholders $6.80 in cash and give them 0.7275 of a common unit of Energy Transfer for every share of SemGroup they own.
Previously, officials had said that cash and equity deal valued a SemGroup share at $17.
Officials also previously said equity consideration received would be treated tax free and that the deal’s total value included Energy Transfer’s assumption of SemGroup debt and other liabilities.
Dallas-based Energy Transfer's core operations before the merger already include complementary natural gas midstream, intrastate and interstate transportation and storage assets, crude oil, natural gas liquid (NGL) and refined product transportation and terminalling assets, NGL fractionation and various acquisition and marketing assets.
SemGroup, operating in western Canada, the Mid-Continent and Gulf Coast, moves energy across North America through a network of pipelines, processing plants, refinery-connected storage facilities and deepwater marine terminals with import and export capabilities.
Energy Transfer officials said SemGroup’s acquisition would enhance the company's oil export opportunities from two terminals on the U.S. Gulf Coast, noting that SemGroup’s Houston Fuel Oil Terminal on the Houston Ship Channel has 18.2 million barrels of crude oil storage capacity, five deep-water ship docks and seven barge docks. The buyer is expected to further expand that capability by building a new pipeline that would connect its Nederland Terminal directly to the SemGroup Houston terminal.
The company also stated the SemGroup acquisition expands its oil and NGL infrastructure because it adds crude oil gathering assets in the Denver-Julesburg Basin in Colorado and the Anadarko Basin in Oklahoma and Kansas, as well as crude oil and natural gas liquids pipelines connecting those basins with crude oil terminals in Cushing.
Previously, SemGroup CEO Carlin Conner had said the deal was a good one for its investors.
“SemGroup has been exploring a range of strategic alternatives aimed at increasing shareholder value, and determined that this combination with Energy Transfer is in the best interests of shareholders — providing immediate value, a significant premium, and opportunity to participate in the future upside of the combined business,” Conner stated.